Their findings suggest the use of mobiles for moving money around will double over the next five years, by which time nearly two-thirds of adults – 30million people – will regularly be transferring money by phone, using mobile banking apps to pay other people and businesses or move money between accounts.

Within this trend is a big rise in the number of people making mobile-to-mobile payments using services such as Paym, which celebrates its first anniversary this week.

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HOW THIS IS MONEY CAN HELP

'I use Paym to pay back friends'

Photographer Claire-Jane Macdonald uses Paym at least once a month to refund friends who have paid for cinema tickets or a meal out.

Claire, from Dundee, sends sums of £10 to £40 via Royal Bank of Scotland’s banking app and likes the convenience of only having to tap in a phone number that is already in her mobile’s contact list.

The 23-year-old, who starts work on a cruise ship in June, says: ‘It’s an easy way to send money. A lot of people don’t carry cash on them nowadays and just pay by card.

‘If a friend pays the bill, you can simply pay them back there and then without needing their bank details.’

It was launched to help bank customers send money to friends or family by just inputting their mobile phone number, rather than a bank sort code and account number.

More than two million people have registered, linking their mobile phone number to their bank account. In total, they have sent in excess of £44million, with the average sum transferred being about £55.

Neil Aitken, spokesman for Paym, says: ‘People use it to split a dinner bill, pay club fees or for collections, such as a colleague’s leaving present. It’s for when you need to pay someone and know their mobile number, but not their bank account details.’

So far more than a dozen banks and building societies offer Paym, including the ‘big five’ – Barclays, HSBC, Lloyds Bank, Royal Bank of Scotland and Santander – and their affiliates NatWest, First Direct, Bank of Scotland, Halifax, Ulster Bank and Isle of Man Bank.

The other participants are TSB, Clydesdale Bank, Yorkshire Bank and Cumberland Building Society.

Paym: If you want to send money, you need to download an app to your smartphone

HOW PAYM WORKS

Customers must first register their mobile phone number with their bank if they want to receive payments from other people.

This can be done via online banking and more than one phone number can be linked to a bank account, benefiting joint account holders. But the same number cannot be linked to more than one account.

Banks and building societies may have their own names for Paym. For example, Barclays offers ‘Pingit’, which existed before Paym, while Lloyds calls it ‘Pay a Contact’.

If you want to send money, you need to download an app to your smartphone, but do not need to register, though the recipient does. The option to pay via a mobile number appears on all the banks’ apps – short for ‘applications’ – the programs you can download to a smartphone.

Aitken says: ‘Rather than being standalone, Paym is part of your bank’s app. There is no need to learn a new password or security set-up.’

For security and because the app is designed for small payments, there is a daily transfer cap – typically £250. To find out more visit paym.co.uk. If you lose your phone, nobody can access the banking app without inputting the security information that you usually enter for online banking, as well as your phone’s PIN, if you have one.

OTHER MOBILE PAYMENTS

Mobile payment apps: Zapp is like Paym but is focused on paying businesses rather than friends or family

New technology is constantly emerging to keep pace with the rise in use of mobile banking apps.

For example, there is Moni, an app for sending payments abroad. As with Paym, the sender only needs to tap in the mobile phone number of the person receiving the money. The recipient will then be sent a text telling them that they need to download the app to secure payment.

If you want to send money abroad to someone who has an older mobile or who doesn’t want to download an app on to their phone, you can still use Moni to pay them using their bank details instead.

Sending money via Moni costs 99p per payment, plus a foreign exchange rate, which is displayed before any money is transferred. There is no charge for payments between mobiles within the UK.

Another app, Zapp, which delayed its launch from autumn last year, is expected to be ready by this summer. It is like Paym but is focused on paying businesses rather than friends or family.

Zapp also sits within existing banking apps and gives customers the choice of paying retailers with just their handset rather than cash, card or cheque. More than 20 major companies have signed up – including Sainsbury’s and Asda, as well as hotel chain Best Western and some charities and utility firms.

Customers of HSBC, First Direct, Santander, Nationwide Building Society and Metro Bank will be among the first wave of people able to use Zapp. But more banks are expected to sign up.

PayPal’s UK app also works for people who want to pay via a mobile number – although the recipient will also need to have a PayPal account.

Apple Pay is expected to launch in the UK later this year – a quick payment option for Apple smartphone users. Customers will hold their handset close to a sensor by the till, with their finger on the phone’s ‘Touch ID’ button – effectively a fingerprint scanner. Apple Pay will also be a function on the Apple Watch, the first wave of which were posted out last week.

...but branches are still a lifeline for so many of us

Counter culture: Many people prefer going into banks

Mobile banking apps may represent the future of banking, but there are many people who still rely on bank branches.

Although branches continue to be shut down in their hundreds each year, the Government has persuaded the big banks to ensure alternative banking facilities are made available to communities that lose their last bank.

These could include free-to-use cash machines or banks on wheels – vans that visit out-of-the-way areas at regular times each week to allow customers to pay in cheques and cash.

Anthony Browne, head of the British Bankers’ Association, says: ‘There are significant events in life where customers need to go into a bank branch.’

Banking in post office branches is also set to grow in popularity.

Most bank customers can already use post offices to withdraw cash and pay in cheques, but the service is being made more comprehensive, for instance allowing small businesses to bank there.

However, customers with complex requirements, such as those making mortgage applications, still need to visit a bank branch.

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Forget cash, cards and cheques: We are now transferring £1.7bn every week on our mobiles